Innovative Change and Productive Resistance in Interorganizational Projects

img WHITE PAPER

2018

Alfons van Marrewijk & Leonore van den Ende

Vrije Universiteit Amsterdam

Department of Organization Sciences

Abstract

This white paper presents research on change and resistance in an interorganizational project (IOP) in the utility sector. Interorganizational change is a multilevel and multi-actor process of which resistance is an integral part. Although it often has a negative connotation, resistance can be productive when it is used to negotiate, compromise, and align different actors in a change plan. To gain insight into how change and resistance transpire in IOPs, longitudinal field research was conducted between 2012 and 2017, focusing on an innovative change plan—the Collaboration Improvement Contract (CIC). Though the change program was initiated and supported by top management, it empowered skillful employees at the work floor to solve problems and provide solutions in practice. However, middle managers were in a more difficult position, causing them to resist the implementation of the innovative change. Eventually, their resistance led to renegotiation and the program's adaptation to align all the levels and actors in a productive sense. Overall, this research provides a dynamic and processual perspective to fully understand change and resistance in IOPs, which is novel in the field of project management.

Keywords: Interorganizational projects; Change; Resistance; Productive resistance

Table of Contents

Abstract

Introduction

Problem Statement

Understanding Change and Resistance in IOPS

Change

Resistance

Case Description

The Collaboration Improvement Contract

A Bottom-Up Change Approach

Stage 1: Bottom-Up Innovations of Empowered Employees

Stage 2: Managerial Resistance to Bottom-Up Innovations

Stage 3: Ongoing Negotiation and Social Pressure

Stage 4: Adaptations and Interventions

Stage 5: Co-Production of Joint Building Process

Discussion and Conclusion

Recommendations

References

Introduction

Because of the difficulties and drawbacks in carrying out work independently, organizations increasingly form interorganizational projects (IOPs) (Van Marrewijk, Ybema, & Smits, 2016). An IOP can be understood as a group of diversely skilled employees from several organizations who work together on a complex task over a limited period of time.

Implementing change in IOPs is complex and challenging as a result of the multi-actor and multilevel nature of interorganizational change. Although change has received growing attention in the field of project management (PM), current PM standards mainly focus on change control and provide little guidance on how to support change initiatives. This is problematic, as change in IOPs frequently involves the members interfering in one another's organizations to bring about change. Therefore, we need to investigate what practitioners do in IOPs when a change plan is implemented.

Moreover, resistance, which is an integral part of and reaction to change, has often been ignored in PM research (Bresnen, Goussevskaia, & Swan, 2005). Though resistance is commonly seen as an obstacle to change, organizational research has shown that resistance can also be productive. For example, thoughtful resistance is perceived to be more important than unquestioning acceptance in sustaining change. Similarly, resistance can be understood as a way to situationally negotiate meaning, finally resulting in change. Resistance can thus be productive when it is used to negotiate, compromise, and align different actors in a change process.

In light of the above, the aim of this research is to understand how change and resistance transpire in the interactions among diverse project actors in an IOP. To achieve this aim, longitudinal field research was conducted between 2012 and 2017, focusing on an innovative change approach—the Collaboration Improvement Contract (CIC)—in the utility sector, involving four operators and five contractors. The CIC change plan is innovative in the sense that it was initiated and supported by top management (top-down), but it also empowered skillful employees at the work floor as change agents to solve problems and provide solutions in practice (bottom-up).

Although initially successful, the change initiative was met with resistance from middle managers who were in a more difficult position between the top and bottom layers of project actors. Importantly, though this first hindered and delayed the change plan, it eventually led to negotiations and adaptations to meet various interests and align different actors in the CIC, which can be seen as productive. This paper will show how and why this process developed over time.

This research makes three main contributions to the field of PM literature. First, whereas the dominant PM literature has perceived managers as change agents and employees as resistors, this research shows that the tables can be turned: Employees can be the change agents and (middle) managers may turn out to be resistors. Second, it illustrates the complex character of change in IOPs and shows that resistance, rather than forming an obstacle to change, is a necessary condition for negotiation and alignment of involved actors. Third, the research provides a multilevel and multi-actor lens to fully understand the dynamics of change and resistance in IOPs, which is a novel perspective in PM studies.

The remainder of the paper is structured as follows: First, the problem statement will be summarized, including the main question that this research set out to answer. Second, the main themes of change and resistance will be defined and explained. Next, the background of the research and case description will be given. Then, the findings will be presented, providing insight into a change initiative and how this initiative was met with and shaped by resistance. Finally, the main conclusions are drawn, including recommendations and suggestions for future research.

Problem Statement

img   Change in IOPs is an essential challenge to project managers because change implies interventions in one another's processes.

img   Implementing change in IOPs is complex and challenging as a result of the multi-actor and multilevel nature of interorganizational change.

img   Change and resistance are not yet well researched in IOPs: How should these phenomena be understood?

img   Change is especially complex in IOPs because of the multi-actor and multilevel nature of interorganizational change: How does a change process transpire?

img   Resistance is an integral part of any change plan: How can resistance be productive in a change process?

Based upon the discussion above, the central research question in this paper is: How can the process of change and resistance be managed in an IOP?

Understanding Change and Resistance in IOPs

The dominant view in PM studies on change is a top-down perspective that perceives change as top-down, episodic, linear, and stepwise. In this paper, change is understood as continuous, uncertain, and transpiring at the work floor during day-to-day interactions and activities. In this bottom-up perspective, change is an inevitable condition of project life in which every employee can be a change agent as decisions on the daily organization of work are increasingly being made at the micro-level (Van Marrewijk, Veenswijk, & Clegg, 2014). Therefore, planned change is a multi-authored process that takes place at work floor, middle management, and top management levels.

Resistance is an integral part of change. Prior PM research on resistance has traditionally focused on how project managers can control or overcome resistance. This view has been challenged by critical management studies, arguing that although managers are generally studied as the agents of change and not as recipients or targets, their responses are akin to those of employees. In other words, managers can be as ambiguous about change as employees because organizational change can bring along fear of monitoring, surveillance, and reduced autonomy. In the same way, employees who are often studied as change recipients and not the agents may actively participate in a change process through their meaning making, reaction, appropriation, and resistance. Consequently, scholars should aim to look at how resistance in IOPs is discursively constituted, including a critical discussion of the change agent–recipient relationship.

Transcending the dichotomy between change agents and resistors, resistance can also be understood as a set of practices that simultaneously enable and constrain change. This highlights the ways in which resistance transpires as a negotiation and interpretation of organizational change and to which organizational actors may adhere different meanings. In a change process, resistance is thus discursively constituted, possibly resulting in an emerging dialectic relation of change agents and recipients. Moreover, tensions and contradictions that are inherent in this dialectic relation can create possibilities for everyday organizational change and transformation. Below, we summarize the most important points regarding the main topics of this research, change and resistance:

Change

img   Top-down change frequently fails because employees are often regarded as passive receivers in the change process rather than as active agents.

img   Conversely, bottom-up change acknowledges employees as change agents who are capable of changing their daily work practices.

img   Planned change is a multi-authored process that transpires at work floor, middle management, and top management levels.

img   Top-down change interventions need not be unsuccessful, as long as employees are included as change agents, too.

Resistance

img   PM literature has mainly understood resistance as something that forms an obstacle to change and, therefore, as something that must be controlled.

img   Tensions that emerge as a result of resistance can create opportunities for negotiation, adaptation, accommodation, and transformation.

img   Employees who resist a change plan might know better than managers what is good for the company.

img   Contrary to the dominant assumption, managers can also be resistors.

img   Resistance can constrain but also enable change, depending on how it is incorporated and managed in a change process.

img   Research has indicated three steps to turning resistance into productive resistance (see Figure 1 below).

img

Figure 1: Three steps to turning resistance into productive resistance (adapted from Courpasson, Dany, & Clegg, 2012).

Case Description

The Collaboration Improvement Contract

The Collaboration Improvement Contract (CIC) is an intervention to improve the relationship between operators and contracts in the Dutch utilities sector (see Figure 2). The general goal of the CIC is “striving to find new and more efficient ways of collaborating” (Middle manager of Operator 1, February 2015).

img

Figure 2: Illustration of the Collaboration Improvement Contract.

Operator 1 is the largest partner, participating in more than 50% of all joint building activities, while Operator 3 (40%), Operator 2 (30%), and Operator 4 (15%) participate less frequently. According to participants, Operator 1 is the most dominant partner: “Yeah, it is the largest. It is our client; I am just a contractor, so if it wants another company to realize the work, they can do it” (Manager, Contractor 2, February 2015).

Other prominent goals concerned the reduction of construction costs by 20%, the improvement of customer satisfaction to a minimum of eight (out of 10), and the reduction of delivery time by 20%. The CIC had to reduce the complexity of work tasks, organization, and coordination.

“We have made the work very complex with all kind of decisions, processes, permits, and responsibilities divided among different companies. We have to look in the mirror and ask ourselves how we can streamline this again.” (Manager, Operator 3)

Although all partners worked in the infrastructure sector, their diversity was great. Operators 2 and 4, for example, were commercial, competitive, client-oriented organizations under the heavy financial pressure of the stock market, while Operator 1 was a former monopolist, which only recently faced competition. This was not the case with Operator 3, which was a monopolist owned by local governments. Finally, all contractors involved in this study were privately owned companies in fierce (price) competition with one another.

A Bottom-Up Change Approach

In order to achieve the aims of the contract, and in line with the emergent character of the intervention, a bottom-up change approach was chosen. CIC respondents stated that changes should not be suggested by managers, but should be in the hands of shop floor employees, as they had well-founded and detailed technical knowledge of the joint building process and the capability of providing the most innovative ideas.

“We at the shop floor can analyze and judge the processes we are working on much better than management because we work directly with these processes on a day-to-day basis. We are the experts; we can immediately spot the bottlenecks.” (Employee, Contractor 2)

The bottom-up change was effectuated by installing two workgroups, each consisting of approximately 10 shop floor employees of both the operators and contractors. These employees frequently discussed daily work practices to come up with innovations. These were then presented to the steering group. In this group, the managers of the operators and contractors “can talk constructively with one another about things that we can start doing together” (Manager, Contractor 3). In the steering group, the equal relation of operators and contractors was strived for: “Of course, we remain client and contractor, but at some point, we will have to meet each other at an equal level” (Employee, Contractor 3). This search for equal power relations was symbolized in the neutral locations where the meetings were held.

The change process can be divided into five main stages (see Figure 3 below). Below each stage will be described, included the interorganizational change practices involved and supporting quotes from respondents.

img

Figure 3: Illustration of the CIC change process.

Stage 1: Bottom-Up Innovations of Empowered Employees

In the first stage, the bottom-up change process engaged employees in several constructive ways:

img   Generating enthusiasm with shop floor employees on process improvements. Most respondents were positive about the potential that the bottom-up approach held to change the work practices:

  “I am totally enthusiastic about the CIC. Yes, I very much enjoy being a part of this.” (Interview, employee, Clay, February 2015)

img   Creating mutual understanding of one another:

  “Some trust is growing now as we do understand each other better now. You understand each other's interests and it is easier to call or meet each other.” (Interview, employee, Energy, February 2014)

img   Exploring and reflecting upon the joint building process. Only a few meetings were needed to come up with numerous possible innovations:

  “We are the experts; we can immediately spot the bottlenecks.” (Interview, employee, Brick, February 2015)

Stage 2: Managerial Resistance to Bottom-Up Innovations

In the second stage, the bottom-up innovations proposed by employees often led to dismissive or even resistant attitudes among middle managers of the CIC partners. Consequently, middle managers constrained the bottom-up change process in various ways:

img   Delaying of decision-making process:

  “Three to six months are needed [by Energy] to round off the decision-making procedures.” (Field notes, steering committee meeting, December 2014)

img   Selecting employees with insufficient competences:

  “I immediately knew that there were some people who were not the right people at this table.” (Interview, manager, Sand, April 2015)

img   Refraining pilot projects from the workgroups:

  “X [Energy engineer] claims that Telecom's management is not supporting the opening up of their digital networks because of competitiveness.” (Field notes, workgroup meeting, November 2013)

img   Asking for more information:

  “We need detailed information on the impact of the innovations in the building process to convince my managers.” (Energy middle manager, field notes, steering committee meeting, April 2015)

img   Hesitating to financially invest in the change process:

  “X [Cable manager] says he is not entitled to comment on or give permission for a lean trajectory.” (Field notes, steering committee meeting, April 2015)

img   Refusing to allow employees to participate in the CIC:

  “I am allowed to join the [pipes] workgroup meetings, but apart from that, internally nothing.” (Interview, employee, Energy, March 2015)

Stage 3: Ongoing Negotiation and Social Pressure

The third stage involved ongoing negotiations among different levels of actors from different CIC partners in order to create social pressure and align different viewpoints. The actors acted in various ways during this time:

img   Searching for the right time for making decisions:

  “It has been an unfortunate timing. The internal reorganization is much more important to them than the CIC and they do not want the CIC to get in the way of that.” (Interview, employee, Stone, March, 2015)

img   Creating social pressure from a steering committee member:

  “Now we are stuck. The only way we can make progress is when we get the green light and full commitment from top management.” (Interview, employee, Stone, February 2015)

img   Involving of the Constructing Netherlands to rebalance the power relations:

  “I have spoken to the top of Energy and they recognize the topics that you addressed.” (Informal conversation with Constructing Netherlands, August 2014)

img   Aligning of top and middle management:

  “I went to my manager and indicated that I no longer wanted to be a project leader if there was no support from the top.” (Informal conversation with Energy project manager, September 2015)

Stage 4: Adaptations and Interventions

During the fourth stage, the manifold negotiations led to adaptations and interventions concerning the CIC change plan, prompting actors to act in more constructive ways:

img   Adapting the speed of transformation to operators:

  “Participants wondered why they hadn't thought about this [two speeds] earlier; there was relief that the CIC could go on.” (Observation, steering committee meeting, December 2015)

img   Installing new middle managers and employees with a change orientation:

  “She [new manager, Energy] really supports the process innovations.” (Informal conversation, employee, Energy, May 2015)

img   Installing project team to facilitate process improvements:

  “I would to like thank John and William [of the project team] as they have done so much work in recent weeks to get this all going.” (Field notes, steering committee, October 2015)

img   Informing employees of operators:

  “We have invited members of the steering committee to present the content of [CIC]. They did so and that is why people, some, know of the initiative.” (Interview, employee, Energy, March 2015)

Stage 5: Co-Production of Joint Building Process

During the fifth and final stage, despite the difficulty of the change process due to the multitude of organizations and actors, hierarchical levels, resistance, negotiations, and adaptations, the CIC members actively co-produced the joint building process in the following ways:

img   Executing a large joint building pilot:

  “In the CIC, a cost reduction has been realized of 61% against the start position.” (Evaluation report, January 2016)

img   Implementing innovations of the joint building process in Cable and Telecom:

  “We have implemented the proposed joint procedure of dealing with contaminated soil.” (Manager, Telecom, steering committee meeting, February 2016)

img   Preparing decision making for implementation with Water and Energy:

  “We need to improve our efforts to try to get the employees of the building department to go along with the new Water strategy.” (Conversation with Water chairman of board of directors)

Discussion and Conclusion

This study investigated how the process of change and resistance transpired between operators and contractors in an interorganizational project (IOP) concerning the Collaboration Improvement Contract (CIC) in the Dutch utility sector. From our analyses, the IOP's complexity becomes evident in terms of the diversity among operators and contractors, which included a mixture of public and private companies, and employees (who had an active role in the CIC), middle managers (who had an ambiguous role in the CIC), and top managers (who had an empowering but absent role in the CIC). In this sense, the CIC can be understood as a multilevel and multiactor change process.

To initiate the change, top management signed the CIC (top-down), empowering employees as change agents and initiators of innovations (bottom-up). After innovations were devised by employees, these had to be transferred to the permanent operators by the middle managers, who found it difficult to maneuver between the top and bottom layers. Therefore, middle managers, especially those from Operators 1 and 3, resisted the CIC in terms of timing, pacing, projectifying, and aligning, thereby constraining the change process. This shows that employees can be change agents and (middle) managers can be resistors, challenging the dominant conception of managers as change agents and employees as resistors.

Importantly, the initial resistance to the organizational change by middle managers eventually enabled the change process as well. Because of the resistance, IOP members negotiated interests and demands in the steering committee over the implementation, timing, pace, and consequences of the CIC. Middle managers of both operators and contractors used organizational and personal networks to intervene and deal with the discrepancies and misfits between private and public partners. Middle managers thus performed practices that hindered, but finally facilitated the CIC change process, which can be seen as “productive resistance.” In this vein, the CIC was first characterized by resistance, which also led to negotiation, accommodation, and the adaptation of the CIC to meet certain needs and demands.

Our findings show that employees know well what is necessary for the work to be done. In the eyes of employees, middle managers became resistors” while top managers became “ghosts” in the eyes of both middle managers and employees. Middle management feared the risks, impacts, and consequences of the CIC on their departments and their personal jobs—findings that are in line with other studies.

This study adds to our understanding of change and resistance in IOP studies in the following ways:

img   Showing that the resistance of middle managers was not triggered by top managers, but by employees who enthusiastically tried to improve and innovate the joint building process;

img   Showing that resistance both constrained and enabled the change process;

img   Showing that there is an informal hierarchy among IOP organizations;

img   Showing the divergent notions of temporality and power clashes among the hierarchical relations; and

img   Devising a multilevel analysis to understand the interactions between employees, middle managers, and top managers.

Recommendations

The study has implications for practitioners and change consultants involved in the design and implementation of interorganizational change, including the following:

img   A bottom-up change approach helps the various members of the IOP to intervene in one another's work processes, while the meetings organized to reflect on change and negotiate resistance contributed to innovations.

img   The strength of the bottom-up CIC change approach is found in the empowerment of skillful employees who swiftly developed solutions and innovations during their collective workgroup meetings.

img   On the other hand, the weakness of the CIC resides in the absence of top managers during the actual change process and the ambiguous position of middle managers, who found it difficult to implement the bottom-up innovations in the operator companies. Special attention is needed for middle management, as they represent the translators between the employees and top managers, and between the temporary and permanent organizations.

img   It is crucial to consider all hierarchical levels of actors and organizations in an interorganizational change process. In the end, all actors and partners of IOPs must be willing to negotiate and accommodate for their mutual benefit or to reach their common goal. This finding invites project managers to critically reflect on hierarchical relations and power issues in temporary interorganizational projects.

img   A practical recommendation is the organization of guided meetings (with temporary rules) to reflect on change and negotiate resistance so that it can contribute to change in a productive way.

References

Bresnen, M., Goussevskaia, A., & Swan, J. (2005). Implementing change in construction project organizations: Exploring the interplay between structure and agency. Building Research & Information, 33(6), 547–560.

Courpasson, D., Dany, F., & Clegg, S. R. (2012). Resisters at work: Generating productive resistance in the workplace. Organisation Sciences, 23(3), 801–819.

Van Marrewijk, A. H., Veenswijk, M., & Clegg, S. R. (2014). Changing collaborative practices through cultural interventions. Building Research and Information, 42(3), 330–342.

Van Marrewijk, A. H., Ybema, S., Smits K., et al. (2016). Clash of the titans: Temporal organizing and collaborative dynamics in the Panama Canal megaproject. Organization Studies, 37(12), 1745–1769.

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